Why Shares of XPO Logistics Gained Ground Today
Shares of XPO Logistics (NYSE: XPO) traded up more than 12% on Tuesday afternoon, and were up by more than 20% earlier in the day, on improving market sentiment concerning the COVID-19 pandemic. Broader markets were higher on Tuesday on headlines that could suggest new virus cases in hotbeds like New York City were decreasing, providing hope that the pandemic might soon be brought under control.
Shipping stocks have been pounded by the pandemic, which has decreased global economic activity, and in doing so has brought down shipping volumes.
XPO is seen as particularly vulnerable to a recession because the company carries more than $7 billion in debt on its balance sheet. Earlier this year, it tried to use divestitures to raise cash and pay down some of its debt, but called off that process in March due to volatile market conditions.
Source Fool.com
